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| Apartment complexes in Seoul. Korea Times file |
By Lee Kyung-min
Koreans faced the heaviest property tax burden relative to the country's gross domestic product (GDP) among OECD members in 2021, resulting from multiple failed real estate policies under the previous Moon Jae-in administration, a ruling party lawmaker said Friday.
Years of demand-control measures implemented by the Moon administration in the form of heavier taxes on owners of expensive and multiple homes, coupled with borrowing regulations put in place to curb rising housing prices only backfired and accelerated price hikes. It is remembered as the most devastating policy misstep of the Moon administration.
Korea's failed yet railroaded approach on the real estate market was markedly different from its peers, almost all of whose tax policies were eased since the COVID-19 pandemic to better navigate the health crisis and the resulting economic slowdown.
Data from Rep. Yoo Gyeong-joon of the ruling People Power Party showed the burden, as measured by property taxes divided by the country's GDP, came to 4.502 percent in 2021, the highest among the 38 OECD member countries. The figure excluded taxes on capital gains.
Korea was followed by Luxembourg (4.021 percent), France (3.823 percent), the United Kingdom (3.814 percent), Canada (3.486 percent), Belgium (3.341 percent), the U.S. (2.971 percent), Spain (2.733 percent), Japan (2.647 percent) and Israel (2.59 percent).
For context, Korea ranked fifth with a figure of 3.788 percent in a similar survey conducted in 2017, the year Moon took office. The country then rose to second place in 2018 and 2019, before topping the list in 2020 and 2021.
In the same period OECD members' real estate-related tax increased by 1.9 percent on average.
The lawmaker called for a prompt revision of tax policies to reverse the years of irrational increases.
"Home prices have soared due to botched real estate policies, spearheaded by the Moon administration," he said.
"The rapid increase in real estate-related taxes should be lowered to the level similar to before when Moon took office, a priority that should swiftly take into account the country's excessively heavy tax, as borne out by the international organization's figures," the lawmaker said.
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